## Master Framework: Types of Engagements

All professional engagements undertaken by a practitioner fall under one of two broad categories:

```

Engagements

├── Assurance Engagements

│ ├── Audit (governed by Standards on Auditing – SA)

│ ├── Review (governed by Standards on Review Engagements – SRE)

│ └── Other than Historical Financial Information

│ (governed by Standards on Assurance Engagements – SAE)

└── Non-Assurance Engagements

└── Related Services (governed by Standards on Related Services – SRS)

├── Agreed Upon Procedures (SRS-4400)

└── Compilation Engagement (SRS-4410)

```

### SQC-1 – The Umbrella Standard

Standard on Quality Control 1 (SQC-1) applies to all engagements — both assurance and non-assurance. It sets firm-level quality control requirements.

### Quick Comparison Table

Engagement Type	Standard	Assurance Level	Report Type
Audit	SA	Reasonable (High)	Audit Report with Opinion
Review	SRE	Limited	Review Report with Conclusion
Other Assurance	SAE	Varies	Assurance Report
Agreed Upon Procedures	SRS-4400	None	Factual Findings Report
Compilation	SRS-4410	None	Compilation Report

> Memory hook: Assurance = practitioner gives a conclusion. Non-Assurance = practitioner only performs/reports facts, no conclusion.

Worked example

### Example 1

Classify the engagement: A listed company engages its CA firm to examine whether specific internal controls over inventory are operating effectively and to issue a formal conclusion — this is an Other Assurance Engagement under SAE (not an audit of FS, not a review, and certainly not a compilation).

### Example 2

Classify the engagement: A bank asks a CA to confirm whether a borrower's stock statement matches the books, following a pre-agreed checklist — this is an Agreed Upon Procedures engagement under SRS-4400 (no conclusion, just factual findings on the agreed steps).

⚠️ Common exam mistakes

Placing Agreed Upon Procedures or Compilation under 'Assurance Engagements' — both sit under Non-Assurance (Related Services).
Forgetting that SQC-1 applies to ALL engagements, not just audits.
Mixing up SA (audit standard) with SRE (review standard) — Review engagements give only limited assurance, not reasonable assurance.
Treating 'Other than Historical Financial Information' assurance engagements as audits — they are governed by SAE, not SA.

Reference:

Now that you've read this — what's next?

Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.

🔥 Drill 5 Qs on this → ✍️ Adaptive practice →

Master Framework – Types of Engagements (Assurance vs Non-Assurance)

Worked example

⚠️ Common exam mistakes